The Canadian economy gained 29,400 jobs in January after a surprising downturn in December — a turnaround that will likely put some spring in Finance Minister Jim Flaherty’s step as he prepares to deliver the budget next week.
The unemployment rate also slid 0.2 percentage points from December to 7.0 per cent for the first month of the year as the number of full-time jobs increased, Statistics Canada reported Friday.
Flaherty said the job trend was good.
“This is comforting as we plan the budget and plan modest, steady job growth in Canada,” he said in Toronto.
While the job numbers exceeded economists’ expectations of 20,000 more jobs in the month, some cautioned against reading too much into the volatile numbers, saying the employment trend is still sluggish.
“While no ball of fire, today’s solid comeback represents a nice recovery from the ugliness in last month’s Canadian employment report,” BMO Capital Markets chief economist Doug Porter said in a report.
“Notably, though, the unemployment rate at 7.0 per cent is precisely unchanged from three months ago and from a year ago. In other words, the underlying trend in job growth is just firm enough to keep up with labour force population growth — no better, no worse.”
Others noted the rebound only made up for two-thirds of the 44,000 jobs lost in December.
Capital Economics said it “suggests that bad weather isn’t the only factor depressing labour market conditions.” It expects modest employment gains over the next few months.
CIBC economist Peter Buchanan agreed that the gain in jobs was better than expected, but noted the monthly job numbers don’t say all that much about the whole economic picture.
“These are volatile numbers and also we did have that large decline (in December),” he said.
Trade numbers Thursday showed the Bank of Canada’s much-hoped-for export recovery is still a work in progress, Buchanan added.
Canada’s trade deficit grew to $1.7 billion in December. The increase came as Statistics Canada also revised the November trade deficit to $1.5 billion compared with an initial estimate of $940 million.
—By Maria Babbage